Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

questions 1-4 without answers being cut off please!! thank you! 5.712,000 Worley Company buys surgical supplies from a variety of manufacturers and then resels and

questions 1-4
without answers being cut off please!! thank you!
image text in transcribed
image text in transcribed
5.712,000 Worley Company buys surgical supplies from a variety of manufacturers and then resels and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 7%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $107 to purchase these supplies For years, Worley believed that the 7% markup covered its selling and administrative expenses and provided a reasonable profit However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown Activity Cost Pool (Activity Measure) Total Cost Total Activity Customer deliveries (Number of deliveries) 8,000 deliveries Manual order processing (Number of manual orders) 639,000 9,000 orders Electronic order processing Number of electronic orders) 299,000 13,000 orders Line item picking (Number of line itens picked) 660,000 400,000 line itens other organization-sustaining costs (None) 680,000 Total selling and administrative expenses 5 2.990,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $31.000 to buy from manufacturers): Activity Activity Measure University Memorial Number of deliveries 19 26 Number of manual orders 0 40 Number of electronic orders 17 Es 1990 Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Activity University Memorial 19 26 0 40 17 0 180 280 d Required: 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial (Hint Do not overlook the $31,000 cost of goods sold that Worley incurred serving each hospital.) Complete this question by entering your answers in the tabs below. ces Required 1 Required 2 Required 3 Required 4 Compute the activity rate for each activity cost pool (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Customer deliveries per delivery Manual order processing per manual order Electronic order processing per electronic order

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Video Basics

Authors: Herbert Zettl

6th Edition

0495569437, 9780495569435

More Books

Students also viewed these Accounting questions

Question

Describe the historical roots of clinical psychology.

Answered: 1 week ago